Johnny Carson apparently does not understand the urgency of forgetting about KAL 007. He’s added Kremlin jokes to his monologue and invariably gets huge cheers. Sample: Gromyko isn’t coming to the UN because he doesn’t like American airports. His heart sets off the metal detector.
For a year and a half the major international lending banks in this country have been playing a risky game: extending fresh loans to insolvent borrowers in order to keep those borrowers’ old loans on the books rather than writing them off and taking losses that would throw most of the big banks into bankruptcy. In order to extend the old loans, the big banks have had to rely on the team spirit of the small outlying banks that have taken pieces of the action while letting the “lead banks” serve as loan underwriter and manager. Citibank recently tried to extend a $45-million loan to Mexico, and the unthinkable happened: Michigan National Bank of Detroit filed suit against Citibank to regain its $5-million piece of the loan. So Citibank extended only $40 million, but refused to pay off Michigan’s $5 million. Interesting questions arise: Did Citibank, as manager of the loan, give proper attention to Mexico’s deteriorating finances? Did Citibank, as holder of billions of dollars of credits against Mexico, act disinterestedly when it asked Michigan to “go along” with a bad loan, when a formal default by Mexico would have bankrupted Citibank? If the court rules in Michigan’s favor, the jig is dangerously near to being, well, up. We have come to the cemetery of international Mickey Mouse finance, and the whistling has stopped. And everyone knows it.
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